“A default would trigger a downgrade for Greece, and possibly other European countries, regardless of what form the restructuring takes, Moody’s said in a press release. This could take the form of a selective ‘reprofiling’ of debt, or large-scale ‘voluntary’ debt buy-backs at large discounts, the agency said.

“‘The full impact on Europe’s capital markets would be hard to predict and harder still to control. The fallout would have implications for the creditworthiness (and hence the ratings) of issuers across Europe,’ the Moody’s report said.”

Eurocrats continue to harp on Greece to get its ship in order. Greece has responded by speeding up plans to sell state-owned assets, but political divisions are making a new round of austerity measures difficult to enact. The constant hectoring of ECB, EU and IMF officials isn’t proving persuasive in the markets, where expectations of a restructuring/reprofiling/default are high. Costs to insure against a Greek debt default are at fresh record highs, according to data-provider Markit.

The euro, however, is trading higher after a strong business confidence reading in Germany. And European bourses are edging higher after opening the weak on a low note.

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